LA committee explores pulling homelessness funds from regional agency

A city of Los Angeles proposal is moving forward that would explore pulling hundreds of millions of dollars in annual funding from the region’s homeless service agency.

Council members on L.A.’s Housing and Homelessness Committee voted, 3-0, Wednesday to approve a request for a report on how the city could contract directly with homeless service providers.

Currently, the city channels funds through the Los Angeles Homeless Services Authority, a joint agency overseen by the city and the county of L.A.

The proposal still needs approval from the full City Council before any work on the report — estimated to take up to three-and-a-half months — would begin.

Councilmember Monica Rodriguez introduced the motion in November, shortly after the release of a county audit that found the agency routinely paid service providers late, often failed to track contract compliance and did not establish agreements requiring service providers to repay nearly $51 million in advances.

Rodriguez, who is no longer on the council’s Housing and Homelessness Committee, said she was pleased to see the motion move forward.

“I'm tired of funding the failure,” she told LAist after the vote. “I look forward to advancing this effort so that we can really have some true reform and accountability with how we spend taxpayer dollars as it relates to homelessness.”

Parallel plans at the county level

In a brief discussion ahead of the vote, Councilmember Bob Blumenfield noted that the L.A. County Board of Supervisors is also exploring pulling the county’s funding from the agency over similar concerns. He said it’s important for the city to keep its options open.

“How we contract with LAHSA isn’t working,” Blumenfield said. “So we need to act with urgency to have alternatives.”

Committee chair Nithya Raman agreed, but she emphasized the report should also explore the potential downsides of pulling city funds. She said the agency has shown an ability to make homeless services contracts go farther by matching city dollars with federal and state funding.

“My recommendation to this committee is that we move this forward so that we can be cognizant of the benefits that this kind of effort could bring,” Raman said, “but also for us to be able to answer what potential losses we might face as a result of bringing these contracts in house.”

Mayor Karen Bass has been critical of plans to pull funding from LAHSA, saying the city’s work should focus on serving the unhoused, not standing up new bureaucracies.

Another audit is on the way

For its current annual budget, LAHSA receives about $307 million from the city and about $348 million from the county.

Both local governments are now considering plans to bypass the regional agency and deliver those dollars to service providers directly through in-house government departments. It’s a move that would dramatically reshape how homeless services are funded throughout L.A. County.

The agency’s leadership has faced criticism for stubbornly high levels of homelessness despite local taxpayers putting billions of dollars toward fixing the crisis. Elected leaders have also faulted Chief Executive Va Lecia Adams Kellum over potential ethics violations, first reported by LAist, when she signed a $2.1 million contract and other agreements that benefited a service provider that employs her husband in a senior leadership role.

Scrutiny of the agency’s accounting and oversight practices is likely to continue, with the scheduled release on Thursday of a new independent audit of the city’s homelessness spending.

The audit was conducted by an outside auditing firm and overseen by Judge David O. Carter.